Let’s Think About Their Retirement Account Wouldn’t you agree that the market only has three directions—up, down, or sideways? Now, let’s test this with a simple 10-year scenario. Suppose you make a one-time deposit of $1,000, and the market alternates between a 10% gain and a 10% loss every other year—starting with a 10% gain. At first glance, you might assume the gains and losses would cancel each other out, leaving you with the same $1,000 after 10 years. But here’s the truth: After 10 years, you would actually have only about $951. That’s a –4.9% loss, not a break-even result. Why? Because average returns and actual returns are not the same when losses are involved. A single down year changes the compounding math—and that difference is the cost of unmanaged losses. This is why we emphasize: Managing your losses is more important than chasing higher returns. As the saying goes: “Bulls make money, bears make money, but pigs get slaughtered.” Let’s compare this scenario to one in which we have the same gains and losses, but we can eliminate all of the negative years and capture (protect) each of the positive year’s gains. Look at the difference. The worst year is zero, and even though only five years had gained, the initial $1,000 grew to $1,610. That, my friend, is a 61% gain in a market that had five years of ZERO returns. Zero can be your hero! It’s not exciting, but you never suffer loss. This is the miracle of having your money insured from ever suffering a loss or paying a fee. Do you see the advantage of risk management? Do you now see why it is so important to have your retirement accounts insured? Oh, you didn’t know you had this option. Well, you do, and you can get it done without surrendering any value.
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